Measuring Sales Force Performance
Appraisals are the common form of measuring how well an employee performed compared to a set of stated objectives; feedback communicates these evaluations.
LEARNING OBJECTIVES
Illustrate methods of measuring sales force performance
KEY TAKEAWAYS
Key Points
- Appraisals can be conducted according to a number of different critieria, which will vary according to company, industry, job, seniority, etc. Employees will usually have a unique set of criteria that they are evaluated against.
- Appraisals can be a sensitive and difficult process. Managers and employees alike tend to dread appraisals. By conducting the appraisal in a considered and proactive manner, tensions can be reduced.
- Feedback is often seen as synonymous with criticism, even though in the broadest sense, feedback is simply communication between two parties. As such, feedback needs to be delivered carefully, with recognition of the particular employee’s unique circumstances and personality.
Key Terms
- appraisal: A judgment or assessment of the value of something, especially a formal one. A performance appraisal evaluates how well the salesperson met their prior stated objectives.
Measuring the performance of the sales force within a company is vital to ensuring its success. This can be done through conducting performance appraisals and offering feedback.
(1) Performance Appraisals
Historically, performance appraisals have been used by companies for a variety of different purposes, including salary recommendations, promotion and layoff decisions, and training recommendations. In general, “performance elements tell employees what they have to do and standards tell them how well they have to do it” (United States Department of the Interior, 2004). One key item that is often forgotten during the appraisal process (by managers and employees alike) is that the appraisal is for improvement, not blame.
Numerous methods exist for gauging an employee’s performance, and each provides strengths and weaknesses for given environments. Appraisal methodologies depend greatly on the type of work being done; an assembly worker will require a considerably different appraisal system than a business consultant. Similarly, a salesperson will be appraised very differently than a researcher.
Performing an appraisal can be nerve racking for both parties if the situation is not handled correctly. There are many acts a manager can perform to make the process easier on both parties, and hopefully, mutually beneficial. Many assume that performance appraisals are meant to identify weaknesses to be worked on, and exposing these weaknesses can be painful for employees. Studies show that organizations should be leveraging the strengths of each employee rather than focusing on their weaknesses. Yearly performance reviews are becoming increasingly rare as companies begin to see the benefits of frequent appraisal. Constant fine tuning of performance can be much more effective than annual overhauls.
Appraisal Methods
- Graphic rating scales: This method involves assigning some form of rating system to pertinent traits. Ratings can be numerical ranges (1-5), descriptive categories (below average, average, above average), or scales between desirable and undesirable traits (poor ↔ excellent). This method can be simple to setup and easy to follow, but is often criticized for being too subjective, leaving the evaluator to define broad traits such “leadership ability” or “conformance with standards.”
- 2+2: This method demonstrates how appraisals can be used primarily for improvement purposes. By offering employees two compliments and two suggestions for improvement focused around high-priority areas, organizations can become more productive. If the goal of the performance appraisal is employee improvement, this system can provide significant benefits; however, if the goals are more akin to compensation changes and rankings, the system provides little benefit.
(2) Feedback
In the broadest sense, feedback is simply verbal or nonverbal communication between two or more parties. Feedback should be given in all work situations, good and bad. However, people sometimes think of feedback as being synonymous with criticism when it is given in situations where expectations have not been met. Regardless, we are constantly surrounded by feedback as we see the consequences of our actions and how our actions affect the impressions of those around us, as shown in this feedback diagram.
Feedback: Feedback is an essential part of our personal life and our work environment, making, giving, and receiving feedback successfully is critical.
One common problem that managers overlook when reviewing performance is remembering that feedback is not all about forms. Traditional performance reviews have checklists, ratings, or reports that are used as tools to analyze feedback in the organization. While these forms are useful in documenting and appraising a person’s performance, feedback should not be dictated by the type of form an organization uses. Instead, it should be well thought out and measured according to the individual employee in question, considering their unique circumstances and abilities.